FOR: BEMA GOLD CORPORATION
TSX, AMEX SYMBOL: BGO
AIM SYMBOL: BAU
May 17, 2005
Bema Gold Corporation: 2005 First Quarter Results/Drilling Commences at Kupol
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 16, 2005) - Bema Gold Corporation
(TSX:BGO)(AMEX:BGO)(AIM:BAU) ("Bema" or the "Company") reports the results from its operations for the
first quarter ended March 31, 2005. All dollar figures are in United States dollars unless otherwise
indicated.
Financial Results
The Company reported a net loss of $14.8 million, or $0.037 per share, for the first quarter of 2005.
The loss for the quarter was due mainly to a write down of the carrying value of the Company's net
smelter royalty interest in the Lo Increible property in Venezuela (see press release dated September
13, 2000) and $4.2 million of Refugio mine start-up costs, which were expensed prior to the scheduled
recommencement of mine operations in the second quarter of 2005. Excluding the write down of the net
smelter royalty interest and the Refugio mine start up costs would reduce the net loss to $7.5
million, or $0.019 cents per share.
Gold Revenue
Gold revenue in the first quarter of 2005 increased by 9%, over the first quarter of last year, to
$21.5 million on sales of 51,792 ounces at an average realized price of $415 per ounce. The Julietta
Mine accounted for $5.5 million from the sale of 14,084 ounces of gold at an average price of $392 per
ounce, while approximately $16.0 million was contributed by the Petrex Mines from 37,708 ounces of
gold sold at an average price of $423 per ounce.
Gold revenue during the first quarter of 2004 totaled $19.7 million on sales of 49,989 ounces at an
average realized price of $393 per ounce.
Operations
Bema's consolidated gold production in the first quarter of 2005 increased by 5% to 55,343 ounces with
an operating cash cost of $346(1)(2)(3) and total cash cost of $361 per ounce(1)(2)(3). For the same
period of 2004, Bema produced 52,497 ounces of gold with an operating cash cost of $307(3)(4) and
total cash cost of $322 per ounce(3)(4). Operating costs remain high mainly as a result of the
strength of the South African rand verses the US dollar and lower grade ore being processed at the
Julietta mine during the first quarter of 2005. (for details see "Petrex Mines" and "Julietta Mine"
sections).
(1) In the first quarter of 2005, consolidated production cash costs are adjusted to reflect a cash
gain of $59 per ounce gold from the exercise of South African rand denominated gold put options. At
Petrex, cash gain from the puts was $82 per ounce gold.
(2) Julietta costs are net of silver by-product credit.
(3) Operating cash costs are calculated in accordance with the Gold Institute Production Cost Standard
and include direct mining, smelting, refining and transportation costs, less silver by-product
credits. Total cash costs, calculated in accordance with this Standard, include operating cash costs,
royalties and production taxes.
(4) Adjusted for rand denominated put option gains from first quarter of 2004.
Liquidity and Capital Resources
The Company ended the quarter with $40.3 million in cash and cash equivalents, compared to $87.1
million at the end of 2004. Working capital at the quarter end was $45.6 million compared to working
capital of $85.6 million at the end of December 2004. The decrease in working capital is mainly due to
supply purchases and transportation costs for Kupol development totaling $24.6 million in the quarter.
Also contributing to the decrease was $9.2 million in capitalized Refugio construction costs, as well
as $4.2 million in Refugio start-up costs that were expensed.
Subsequent to the quarter end, Bema increased the Kupol bridge loan facility with Bayerische Hypo- und
Vereinsbank AG ("HVB") from $60 million to $100 million. As of March 31, 2005, $50 million of this
facility had been utilized.
Julietta Mine, Russia (Bema 79%)
During the quarter, Julietta processed 40,307 tonnes of ore at an average grade of 14.67 grams per
tonne, producing 16,300 ounces of gold at an operating cash cost of $270 per ounce and a total cash
cost of $323 per ounce. Julietta had a mine operating loss of $1.6 million for the period, but
generated cash from operations of approximately $700,000. The high operating costs during the quarter
were a result of lower than budgeted gold and silver grades being processed, higher fuel charges and
mine equipment availability being low, causing delays in backfilling and subsequently stope
availability.
Higher grade ore is being mined in the second quarter and in order to improve productivity and
equipment availability, additional supervision has been added to the underground and maintenance
departments. Furthermore, additional underground equipment ordered in the fourth quarter of 2004 has
been received and is now operating. As a result, Julietta has exceeded budget thus far in the second
quarter.
For the same period last year, Julietta milled 37,171 tonnes of ore at an average grade of 19.5 grams
per tonne gold, producing 20,314 ounces of gold at an operating cash cost of $184 per ounce and a
total cash cost of $224 per ounce.
Exploration continues at Julietta where a total of approximately 24,000 metres in 179 surface and
underground holes have been completed thus far, this year. Significant near surface results in V-5
vein has resulted in some adjustment in the mine plan to mine near surface material. Drill results
from a 75 metre long zone in the V-5 vein contained up to 48.3 grams per tonne (g/t) gold and 245 g/t
silver over 5.95 metres (hole 1141), 40.3 g/t gold and 568 g/t silver over 3.85 metres (hole 1172),
and 32.5 g/t gold and 547.3 g/t silver over 4.6 metres (hole 1176). At 60 meters below surface in the
same zone, hole 1149 contained 56.4 g/t gold and 103 g/t silver over 4.4 metres. Julietta's mining
department is currently reviewing these results to evaluate scheduling of production from this zone.
Petrex Mines, South Africa (Bema 100%)
Petrex produced 39,043 ounces of gold during the quarter at a total cash cost of $379 per ounce(1)
from 508,170 tonnes of ore milled at an average grade of 2.39 grams per tonne. Petrex reported a mine
operating loss of $3.1 million which was off-set by a gain of $3.2 million from the exercise of rand
denominated put options during the period. Total ounces produced were on budget during the quarter,
however, operating costs were 10% over budget as the Petrex mines processed more tonnes of lower grade
surface ore than planned to supplement shortfalls of higher grade ore from underground operations.
Another factor contributing to the higher operating costs compared to budget was that the average
exchange rate of 5.97 rand to the dollar for the first quarter of 2005 which was approximately 4%
stronger than the Company's budget assumption of 6.2 rand to the dollar.
During the quarter, the principal underground mining contractor was replaced, which affected
underground production to some degree. Final changes to the management and operation of all of the
shafts were implemented by the end of March.
Bema has entered into discussions with a number of South African companies regarding possible joint
ventures or business combinations in an attempt to create a more favorable economic production
scenario at Petrex.
During the first quarter of 2004, Petrex produced 32,183 ounces of gold at a total cash cost of $384
per ounce(2) from 466,435 tonnes of ore milled at an average grade of 2.3 grams per tonne.
(1) Total cash costs per ounces are adjusted to reflect a cash gain of $82 per ounce gold from the
exercise of South African rand denominated gold put options in the first quarter of 2005.
(2) Total cash costs per ounces are adjusted to reflect a cash gain of $40 per ounce gold from the
exercise of South African rand denominated gold put options in the first quarter of 2004.
Refugio Mine, Chile (Bema 50%)
The Refugio mine is in the early stages of commissioning and is expected to reach full production by
the third quarter. Bema's share of estimated production for the remainder of the year is projected at
approximately 50,000 ounces of gold. Total cash operating costs are projected at $298 per ounce in
2005, slightly higher than the life of mine projections of $250 per ounce, due to the ramp up
period.(i) The total capital cost of the expansion was reviewed in late March and now stands at $100
million plus a $34 million lease for the new mining fleet (Bema's share is 50%). The mine plan at
Refugio is being updated and is expected to be completed by mid year.
(i) These projections have been estimated by Bema
Kupol Deposit, Russia (Bema 75%)
Bema is pleased to announce that exploration drilling has commenced at the Kupol project using two
drill rigs. The first rig is focused on condemnation drilling, while the second has started
exploration drilling in the North zone. The remaining four drills will commence when sufficient water
flow has started in the creeks, which is expected before the end of May. The 2005 program will consist
of 45,000 metres of drilling, with the main focus being the follow up of discoveries made late in the
2004 program, specifically deep drilling in the North zone and the offset vein target in the South
zone (for details please refer to press release dated September 23, 2004). The deposit remains open to
the north and south and numerous other parallel structures remain largely unexplored.
The feasibility study for Kupol is progressing on schedule and is expected to be completed by the end
of May 2005. The 2005 development program has commenced consisting of road construction and site earth
works. Development activities in the quarter included the completion of an explosive storage area,
site roads and commencement of road construction to the airstrip.
Cerro Casale, Chile (Bema 24%)
In September 2004, Placer Dome issued a certificate (Certificate B) under the Shareholders' Agreement
indicating that it has commenced, or is continuing to use reasonable commercial efforts to arrange
financing for the Cerro Casale project on commercially reasonable and customary terms in accordance
with the financing requirements of the Shareholders' Agreement. Subject to the terms of the
Shareholders' Agreement, Placer Dome has until the end of 2005 to arrange such financing. Placer Dome
is currently updating the feasibility study for Cerro Casale and is advancing discussions on key
commercial contracts and long-term marketing off-take arrangements. If Placer Dome elects not to
proceed with the project and it is still deemed financeable under the terms of the Shareholders'
Agreement, Placer Dome is required to relinquish its interest in Cerro Casale. The Cerro Casale
project is located in Chile and is a joint venture between Placer Dome (51%), Bema (24%) and Arizona
Star Resource Corp. (25%).
Bid for Arizona Star
Subsequent to the end of the first quarter, Bema decided not to proceed with a proposed offer to
purchase shares of Arizona Star Resource Corp., previously announced on December 20, 2004. In
addition, the Company has elected not to renew its management contract with Arizona Star and Roger
Richer, Bema's last representative on the Arizona Star Board of Directors, has resigned. Bema reached
these decisions due to current market conditions and the Company's desire to focus on its priority
growth projects, the Kupol project and the Refugio mine.
Gold Forward and Option Contracts
The Company reduced the number of outstanding gold forward and contingent forward contracts by 21,750
ounces during the first quarter of 2005. The Company intends to deliver into all of the outstanding
Julietta forward contracts on the designated maturity dates out to 2006.
/T/
2005 2006 2007 2008-2012
----------------------------------------
----------------------------------------
Gold
Forward contracts (ounces) 30,050 43,350 - -
Average price per ounce $ 350 $ 319 $ - $ -
Dollar denominated -
Put options purchased
$290 strike price (ounces) 19,686 23,790 21,342 38,646
$390 to $422 strike price
(ounces) 39,000 68,000 68,000 38,500
Rand (ZAR) denominated -
Put options purchased (ounces) 68,403 - - -
Average price per ounce (ZAR) 3,100 - - -
Average price per ounce
(U.S.) (i) $ 497 $ - $ - $ -
Call options sold (ounces) 51,000 57,750 59,000 35,250
Average price per ounce $ 466 $ 462 $ 462 $ 465
Contingent forwards (maximum)
$320 strike price (ounces) 5,000 - - -
$350 strike price (ounces) 26,250 36,000 36,000 132,000
Silver
Forward contracts (ounces) 200,000 - - -
Average price per ounce $ 6.27 $ - $ - $ -
Put options purchased
(ounces) 450,000 600,000 - -
Average price per ounce $ 6.34 $ 6.34 $ - $ -
Call options sold (ounces) 450,000 600,000 - -
Average price per ounce $ 7.65 $ 7.65 $ - $ -
(i) Based on 6.2342 rand to one U.S. dollar, being the closing rate
at March 31, 2005.
/T/
The mark-to-market value of the Company's off balance sheet gold hedge contracts as at March 31, 2005
was approximately negative $2.3 million.
Mineral Reserve and Resource Statement
To view the Mineral Reserve and Resource Statement, please click on the following link:
http://www2.ccnmatthews.com/database/fax/2000/bema516.pdf.
Outlook
During the remainder of 2005, Bema expects to achieve several milestones towards its goal of becoming
a 1 million ounce per year gold producer. The Refugio mine has commenced early stage commissioning and
is scheduled to achieve full production in the third quarter of this year. At Kupol, the 2005
development program and the 2005 exploration program have both commenced. A bankable feasibility study
for Kupol is scheduled to be published by the end of May and Bema expects to arrange the financing for
the project by the third quarter. Finally, Placer Dome is required to arrange financing for Cerro
Casale by the end of the year. With all of these developments scheduled for the next three quarters,
Bema remains one of the most active growth oriented companies in the gold mining sector.
Conference Call Details
Bema will host a conference call and webcast to discuss first quarter results on Monday, May 16, 2005
at 2:00 pm PST / 5:00 pm EST. You may access the call by calling the operator at 416-695-6120 or toll
free 1-877-888-7019 prior to the scheduled start time. A playback version of the call will be
available for one week after the call at 416-695-5275, or within North America call toll free 1-888-
509-0081. The webcast can be accessed from Bema's web site at www.bema.com.
On Behalf of BEMA GOLD CORPORATION
Clive T. Johnson, Chairman, C.E.O., & President
Bema Gold Corporation trades on the Toronto Stock Exchange (TSX) and the American Stock Exchange
(AMEX). Symbol: BGO. Bema Gold also trades on the London Stock Exchange's Alternative Investment
Market (AIM). Symbol: BAU.
Some of the statements contained in this release are "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or
achievements to differ materially from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Forward-looking statements in this release include
statements regarding: the Company's projections regarding gold production, costs of production,
drilling and development program and financings. Factors that could cause actual results to differ
materially from anticipated results include risks and uncertainties such as: risks relating to
estimates of reserves, mineral deposits and production costs; mining and development risks; the risk
of commodity price fluctuations; political and regulatory risks; and other risks and uncertainties
detailed in the Company's Form 40-F Annual Report for the year ended December 31, 2004, which has been
filed with the Securities and Exchange Commission, and the Company's Renewal Annual Information Form
for the year ended December 31, 2004, which is an exhibit to the Company's Form 40-F and is available
at the SEDAR website. The Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
/T/
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31
(Unaudited)
(in thousands of United States dollars, except shares and per
share amounts)
2005 2004
---- ----
GOLD REVENUE $ 21,478 $ 19,686
----------- -----------
EXPENSES
Operating costs 21,703 17,669
Depreciation and depletion 3,890 3,558
Refugio re-start of operations 4,188 199
Julietta warehouse fire loss 294 1,000
Other 677 433
----------- -----------
30,752 22,859
----------- -----------
MINE OPERATING LOSS 9,274 3,173
----------- -----------
OTHER EXPENSES (INCOME)
General and administrative 2,673 1,887
Interest and financing costs 1,209 1,805
General exploration 269 211
Stock-based compensation 852 628
Foreign exchange losses/(gains) (161) 1,145
Other 60 (119)
----------- -----------
4,902 5,557
----------- -----------
LOSS BEFORE TAXES AND OTHER ITEMS 14,176 8,730
Write-down of net smelter royalty 3,099 -
Write-down of Yarnell mineral property - 8,527
Realized derivative (gains) (1,713) (417)
Unrealized derivative losses/(gains) 1,611 (2,339)
Equity in losses of associated companies 12 44
Investment (gains) (126) (384)
----------- -----------
LOSS BEFORE INCOME TAXES 17,059 14,161
Future income tax (recovery) (2,243) -
----------- -----------
LOSS FOR THE PERIOD $ 14,816 $ 14,161
----------- -----------
----------- -----------
LOSS PER COMMON SHARE
- basic and diluted $ 0.037 $ 0.040
----------- -----------
----------- -----------
Weighted average number of common
shares outstanding (in thousands)
- basic 400,501 355,743
----------- -----------
----------- -----------
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31
(Unaudited)
(in thousands of United States dollars)
2005 2004
---- ----
OPERATING ACTIVITIES
Loss for the period $ (14,816) $ (14,161)
Non-cash charges (credits)
Depreciation and depletion 3,890 3,558
Amortization of deferred
financing costs 45 465
Equity in losses of
associated companies 12 44
Derivative instruments 1,501 (2,513)
Investment (gains) (126) (384)
Future income tax (recovery) (2,243) -
Stock-based compensation 852 628
Write-down of net smelter
royalty 3,099 -
Write-down of Yarnell mineral
property - 8,527
Other 2,096 (1,637)
Change in non-cash working
capital (3,214) 921
----------- -----------
(8,904) (4,552)
----------- -----------
FINANCING ACTIVITIES
Common shares issued, net
of issue costs 6 110
Kupol bridge financing 4,000 -
Capital lease repayments (818) -
Convertible loan, net of
issue costs - 66,874
Julietta project loan repayment - (5,583)
Petrex loan repayment - (1,500)
Other (7) -
----------- -----------
3,181 59,901
----------- -----------
INVESTING ACTIVITIES
Kupol development (21,693) (6,273)
Kupol exploration (2,920) (3,967)
Refugio construction (9,158) (737)
Julietta Mine (1,269) (228)
Julietta exploration (1,515) (734)
Petrex Mines (1,421) (1,718)
Petrex exploration (362) (420)
Acquisition, exploration and
development (2,092) (1,997)
Other (461) 73
----------- -----------
(40,891) (16,001)
----------- -----------
Effect of exchange rate changes
on cash and cash equivalents (166) 127
----------- -----------
(Decrease)/Increase in cash and
cash equivalents (46,780) 39,475
Cash and cash equivalents,
beginning of period 87,111 30,773
----------- -----------
Cash and cash equivalents,
end of period $ 40,331 $ 70,248
----------- -----------
----------- -----------
BEMA GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)
As at As at
March 31 December 31
2005 2004
ASSETS
Current
Cash and cash equivalents $ 40,331 $ 87,111
Accounts receivable 9,908 8,019
Marketable securities, at cost
(Market value - $12.1 million;
December 31, 2004 - $13.8 million) 3,554 3,554
Inventories 19,862 16,113
Other 5,967 6,827
----------- -----------
79,622 121,624
Investments 5,581 5,593
Property, plant and equipment 454,507 418,883
Unrealized fair value of derivatives 6,688 13,761
Deferred derivative losses 6,110 6,718
Future income tax assets 5,100 5,100
Other assets 17,239 21,374
----------- -----------
$ 574,847 $ 593,053
----------- -----------
----------- -----------
LIABILITIES
Current
Accounts payable $ 29,952 $ 32,250
Current portion of long-term debt 4,068 3,730
----------- -----------
34,020 35,980
Unrealized fair value of derivatives 43,119 49,299
Long-term debt 134,958 129,937
Future income tax liabilities 24,072 24,321
Asset retirement obligations 17,623 17,418
Other liabilities 1,037 664
Non-controlling interest 2,588 2,587
----------- -----------
257,417 260,206
----------- -----------
SHAREHOLDERS' EQUITY
Capital stock
Issued - 400,503,569 common shares
(December 31, 2004 - 400,498,902) 555,912 557,365
Value assigned to stock options and
share purchase warrants 19,912 19,060
Convertible notes 18,849 18,849
Deficit (277,243) (262,427)
----------- -----------
317,430 332,847
----------- -----------
$ 574,847 $ 593,053
----------- -----------
----------- -----------
Approved by the Directors
Clive T. Johnson Robert J. Gayton
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Bema Gold Corporation
Ian MacLean
Manager, Investor Relations
(604) 681-8371
OR
Bema Gold Corporation
Derek Iwanaka
Investor Relations
(604) 681-8371
investor@bemagold.com
www.bema.com
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News
Release.
-0-
Bema Gold Corporation
Bema Npv (LSE:BAU)
Historical Stock Chart
From Jun 2024 to Jul 2024
Bema Npv (LSE:BAU)
Historical Stock Chart
From Jul 2023 to Jul 2024
